Forex News: Reduced Forex Market Volatility in the 4th Week of January 2024

In the fast-paced world of forex trading, staying ahead of the curve is not just an advantage but a necessity. Every twist and turn in the global economic landscape can send ripples through the currency markets, making real-time information a trader’s most valuable asset. In this ever-changing environment, being well-versed in the latest forex news isn’t just about staying informed; it’s about making informed decisions that can significantly impact your trades.

According to Daily Forex, here are a few insights and potential trends to keep an eye on in the forex market. 

Reduced Forex Market Volatility

During the previous week, the Forex market displayed a significant reduction in directional volatility, notably characterized by the fact that only one major currency pair exhibited fluctuations exceeding 1%. This subdued market activity suggested a period of relative stability and a potential consolidation phase across various currency pairs.

Federal Reserve Outlook Dampens Rate Cut Expectations

Surprisingly, this surge in stock markets transpired despite the CME’s FedWatch tool indicating a significant reduction in expectations for a March rate cut by the Federal Reserve. Presently, markets are estimating a mere 46% probability of a rate cut in March, with almost no anticipation for one in the upcoming meeting this week.

Central Bank Policies and Strong US GDP

While last week featured policy meetings from major central banks (Bank of Japan, European Central Bank, and Bank of Canada), the real standout was the robust US Advance GDP data. This unexpected strength in the US economy intensifies scepticism regarding a March rate cut by the Fed. All three central banks adhered to expectations by maintaining unchanged interest rates. The Bank of Canada, however, hinted at a potential rate cut in Q2, adding a dovish undertone. The Bank of Japan slightly revised down its inflation forecast but retained its ultra-loose monetary policy.

Assessing Currencies Amidst Market Flux

In the Forex market, the Swiss Franc exhibited strength, while other currencies experienced marginal changes throughout the week. The US Dollar demonstrated some resilience but lacks a clear long-term trend, making it susceptible to consolidation.

Last Week Data Releases

  • US Core PCE Price Index: A 0.2% month-on-month increase, aligning with expectations.
  • US Advance GDP: Significantly surpassed expectations, showcasing annualized growth of 3.3% over the past quarter against an anticipated 2.0%.
  • UK, German, French Flash Services & Manufacturing PMI: Strong performance in services in the USA and the UK, coupled with improved manufacturing in Germany and France.
  • New Zealand CPI (Inflation): Met expectations precisely.
  • US Unemployment Claims: Slightly worse than anticipated.


The news presented on Prime Codex is solely those of the analysts quoted. They do not represent the opinions of Prime Codex on whether to buy, sell, or hold specific pairs. Traders are advised to conduct their independent research before making an investment decision.

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